Ever gone to the movies and watched a scene that makes you roll your eyes?
The same clichéd tropes that plague nearly every big picture script:
- A victim nearly falling to their death but being saved single-handedly by the hero.
- Character walks into a dark room and turns on the light, to find someone sitting in a high-back chair.
- It’s dark and scary…and the main character’s flashlight dies.
- Massive explosion and the hero coolly walks away without looking back.
- Cocking a gun to show you mean business.
- Main character dying, then gasping back to life a few seconds later.
You probably see these plot lines in movies all the time…and they rarely happen in real life.
But occasionally they do…
And one of these recently reared its exhausted head in the parliamentary public gallery during question time.
Prime Minister Jacinda Ardern found herself bearing the weight of the public’s outcry over high petrol prices.
The people are mad. They’re feeling victimised. They need relief. What did she do?
Off the cuff, she made a big promise — no more regional fuel taxes!
Your classic ‘captain’s call’. It felt a lot like a trope best seen in The Office as something Michael Scott or David Brent would do.
In one episode called ‘Scott’s Tots’, Michael Scott promises a class of underprivileged children that he’d pay for their university tuition if they graduate from high school. Because of that promise, the kids push hard and excel throughout their schooling.
Years later, when the kids have just graduated high school, they eagerly call on Michael to deliver on his promise.
Reluctantly, he breaks the bad news to them — he never had the funds in the first place…and they’d be on their own for tuition.
It’s a cringey, stomach-twisting episode in typical Office fashion…but it reflects a sad reality of real life. When their backs are against a wall, those in power will quickly throw out promises that they’ll never be able to keep — whatever they can do to get back into the public’s good graces.
When PM Ardern proudly declared that there’d be no more regional fuel taxes until 2021, you know that several MPs started sweating.
According to Simon Bridges — and confirmed by Stuff.co.nz — 14 councils outside of Auckland were in the process of proposing regional taxes in their cities.
With a word, Jacinda threw those plans out the window.
Even Associate Transport Minister Shane Jones, of all people, didn’t know about it until ‘the Prime Minister stood up.’ [openx slug=inpost]
No taxes is still good, right?
As an Aucklander, this ship has already sailed…our 11c-per-litre tax has already been enacted.
But, for everywhere else, this guarantee could provide the stability and predictability that businesses crave. If you’re in the business of moving product, a three-year price lock gives you some strategic breathing room. Therefore you feel confident and take greater risks.
That should result in some economic growth — in theory, at least.
So it’s good, right?
Not so fast…
The 14 councils who were planning on enacting this fuel charge were probably also planning transport projects around the increased tax revenue.
But now they’ll either need to scrap the projects or find a new source of funding. Sadly the latter’s more likely.
The truth is, the New Zealand government is a ravenous beast. It needs to stay plump and full to keep on keeping on. And it’s developed a taste for your sweet, sweet money.
Like a repeat failed dieter, it boldly rejects one thing, just to fill the gap some other way.
Can’t have vodka? Hello, tequila.
No pasta? I’ll have bread instead.
Ban on fuel taxes? Introducing the ‘council pump fee’…
Call it what you want. This monster’s getting fed whether you like it or not.
Refocus your energy
To me, this whole story is political gobbledygook.
It’s politicians squabbling over policy while the rest of us empty our wallets at the pump. It’s about elections and public perception. It’s about making promises and building projects for the sole goal of reserving one’s nook in the Beehive.
And, sadly, these conversations have wandered so far away from the needs and desires of the consumer that it may be best to simply ignore it completely.
That’s not defeatist; it’s recognising what you do and do not have control over.
This fuel tax poppycock? Above our pay grade.
But your portfolio, your investments, your finances — these you do have control over…and through these, you can improve your situation.
In other words, a series of smart investments could transform your life — an 11c fuel tax won’t.
That’s why, here at Money Morning New Zealand, we focus our time and energy into helping fellow investors explore actionable opportunities…and avoiding tangible threats…not vote-mongering that weakly masquerades as ‘financial news’.
In the coming weeks, we’ll be covering ideas such as promising sectors in New Zealand’s economy, certain popular stocks that could soon drag your portfolio down, investing myths, strategies for economic downturns, what’s next for China, why housing’s poised to topple and more…
Just keep tuning in…
Best,
Taylor Kee
Editor, Money Morning New Zealand